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KenolKobil FY 2012 substrata loss of 9b!
Rank: Chief Joined: 1/3/2007 Posts: 18,129 Location: Nairobi
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Do you have 1mn KK to sell at 9.75? There are buyers ready. Don't forget KK is related to Kestrel who has a huge roster of foreign institutional clients who can probably buy up the entire firm if it was for sale at Shs 8-10. A pity coz I was waiting for 7 like many other investors. 4Q 2012 & 1Q 2013 were profitable [not sure how profitable] according to the Press Release. Total indicated that they had turned the corner as well [except for the Triton/Glencore settlement payout] so it might be a trend. Profits mean little. What's the ROE & ROA? BIDS 1.80M Quantity Price Splits Time 65,800 9.90 5 10:01:32 10,000 9.85 1 10:01:32 105,300 9.80 2 10:01:32 1.03M 9.75 4 10:01:32 14,500 9.70 2 10:01:32 ASKS 30,400 Quantity Price Splits Time 6,200 10.00 1 10:01:32 79,000 11.00 5 10:01:32 - - - - - - - - - - - - TRADES Quantity Price Time 800 10.00 09:55:29 2,500 10.00 09:54:30 15,800 10.25 09:48:44 - - - - - - Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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Aguytrying wrote:The share price action after announcement of the loss is having me worried. ITs the top gainer today so far at 10.25(5.67%).
I would have been ok with the share getting hammered to 8-9 in the short time, because it would MAKE SENSE!
This doesn't make sense. It leaves me wondering why? why is there so much demand and might the buyers know/or think they know something. Or is it just the cool aid going round at the NSE at the moment.
Either way as a shareholder i feel more at risk now than if the share plummeted. I have this eerily feeling that the music might stop at any time.
Im i alone in this? Me thinks its speculative play for majority of buyers. They believe they are bottom fishing. Once this curiosity if satisfied, well, the DJ might just switch off the music OR the loss might have been forgotten by then. Pesa Nane plans to be shilingi when he grows up.
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Rank: Chief Joined: 1/3/2007 Posts: 18,129 Location: Nairobi
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mwekez@ji wrote:mkonomtupu wrote:Aguytrying wrote:Lets talk numbers.
1.What does the loss do to the assets of the company?
2.How does it affect the shareholders stake in the company?
bear with my basic questions KK has some good assets sometime back the management had talked about going into real estate. I hope they can pursue the same instead of selling assets to support a retail business with low margins and price controls. You can't spend good money chasing bad money. If they can't negotiate with the new govt to remove or relax the price controls its best to leave that sector to NOCK to do oil retail business the govt can absorb the losses that come from the inefficiencies in this sector but not private capital. Shareholders want to make money it doesn't matter from which sector. It's time KK management realised this or they surely but slowly go down the tubes @mkonomtupu, Could you have even a rough estimate of the true value of KK assets? &why KK choose to convert to historic valuation of the assets? It makes it very difficult to decrypt value in the Balance Sheet which would be good to know incase another takeover comes knocking or when the worst comes knocking I disagreed at going back to Historic Value but 1) No need to revalue regularly due to costs 2) Reduced depreciation costs esp on buildings. Land cannot be depreciated (or impaired) unless there is a material reason e.g. land taken by road expansion. See the closed KK on Muranga Rd towards Pangani from Ngara. 3) Makes ROE & ROA look better. That's why I disagree with the management. 4) Wild fluctuations in REPORTED value of land/properties in Kenya. The comparisons are not easy with an almost non-existent database of land values. Many land valuations are done at values the owners want not the value in an open market. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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VituVingiSana wrote: What's the ROE & ROA?
All are currently negative. The huge loss has consumed equity and reduced the Net Book Value per Share by a whooping KES 4.27 and worse my analysis tells me that KK NBV is quite low
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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mwekez@ji wrote:VituVingiSana wrote: What's the ROE & ROA?
All are currently negative. The huge loss has consumed equity and reduced the Net Book Value per Share by a whooping KES 4.27 and worse my analysis tells me that KK NBV is quite low What analysis is this???? when KK assets are carried at historic cost!!!
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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the deal wrote:mwekez@ji wrote:VituVingiSana wrote: What's the ROE & ROA?
All are currently negative. The huge loss has consumed equity and reduced the Net Book Value per Share by a whooping KES 4.27 and worse my analysis tells me that KK NBV is quite low What analysis is this???? when KK assets are carried at historic cost!!! The ROE & ROA are in the negative and it would never change even if the assets were not carried at historic cost!!! ... You young boy have a lot to learn. .... You also fail to answer the important questions (like Post 64) and then you come yapping. what an immature character you are
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Rank: Veteran Joined: 2/10/2010 Posts: 1,001 Location: River Road
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@mwekez@ji if you are a KK shareholder you need to read the article below with an open mind and then looks at the comments from @coldtusker and ask "What is prompting the principal shareholders of KenolKobil to want to dispose of their assets?" http://www.businessdaily...1/-/5eipsm/-/index.html
"If KenolKobil plans to remain in the market, then it may be necessary to completely and visibly overhaul its management (and board) to provide an opportunity for new style, vision and flexibility in a market that has become very competitive and with increased regulatory demands." IMHO KK has good assets but potential skeletons and they used lawyers too much to cover for the skeletons. In the words of Lawrence Garfield about lawyers in business you use them... "Kate Sullivan: Well, for someone who has nothing nice to say about lawyers, you certainly have plenty of them around. Lawrence Garfield: They're like nuclear warheads. They have theirs, so I have mine. Once you use 'em, they f*** everything up."
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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mwekez@ji wrote:the deal wrote:mwekez@ji wrote:VituVingiSana wrote: What's the ROE & ROA?
All are currently negative. The huge loss has consumed equity and reduced the Net Book Value per Share by a whooping KES 4.27 and worse my analysis tells me that KK NBV is quite low What analysis is this???? when KK assets are carried at historic cost!!! The ROE & ROA are in the negative and it would never change even if the assets were not carried at historic cost!!! ... You young boy have a lot to learn. .... You also fail to answer the important questions (like Post 64) and then you come yapping. what a character you are Come slowly...I was reffering to your analysis of NBV not ROE & ROA those are negative...its common knowledge.....I repeat....how did you arrive at KK's NBV being much lower if KK's asset are carried at historic cost on the B/S?
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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the deal wrote:mwekez@ji wrote:the deal wrote:mwekez@ji wrote:VituVingiSana wrote: What's the ROE & ROA?
All are currently negative. The huge loss has consumed equity and reduced the Net Book Value per Share by a whooping KES 4.27 and worse my analysis tells me that KK NBV is quite low What analysis is this???? when KK assets are carried at historic cost!!! The ROE & ROA are in the negative and it would never change even if the assets were not carried at historic cost!!! ... You young boy have a lot to learn. .... You also fail to answer the important questions (like Post 64) and then you come yapping. what an immature character you are Come slowly...I was reffering to your analysis of NBV not ROE & ROA those are negative...its common knowledge.....I repeat....how did you arrive at KK's NBV being much lower if KK's asset are carried at historic cost on the B/S? I repeat The huge loss has consumed equity and reduced the Net Book Value per Share by a whooping KES 4.27 {Simple direct calculations from the financials (6,284,575,000/ 1,471,761,200)} KK NBV is quite low {Back-Of-The-Envelope Calculation (you need to learn this)}
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Rank: New-farer Joined: 1/28/2013 Posts: 61 Location: Nairobi s
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Translate this in swahili,Mazee si get anything Never be afraid to try something new.Remeber,amateurs built the ark Professionals built titanic.-Anonymous
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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So I'm winning....
Projected EPS for FY 13 is KES2
DPS KES0.5
Payout ratio 25%
DY @ 10.20 is 4.9%
Assume exit PE of 10 vs current Market PE of 11.7
Therefore target Price: 10X2=KES20
Upside: 96%
Rating: Strong BUY
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Rank: Member Joined: 2/8/2007 Posts: 808
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KK margin's are thin, reminiscent of most utility companies and retail companies operating in organized markets. KK being a utility company has natural protection from ERC in a way provided it can maintain its market share. Obviously 2012 murphy's law applied in KK. Whatever could go wrong went wrong. Sales decline, Hedge losses, cost pressure, margin erosion and a monumental loss. The mere fact that KK survived all this and has not come back to shareholders for funding is strong testimony of the company's strength. Even good old KCB can not withstand a 9B loss without requesting for a shareholder bailout. CERTAINLY KK will bounce back this year. The beauty of their case is that due to their high operational leverage if they avoid the hedges and contain costs they easily turn in a decent profit.
I know of a certain company on NSE which is likely to report worse results than KK in a few months time and this one will require a bailout immediately thereafter.
One certain pattern I have picked is that oil companies seem to get a whacking in election years. Pricing and ullage issues crop up in election years and these end up disorganizing oil companies.
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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@kausha. I think it will be KQ. The only problem is last year, they had the hugest cash call in history. Imagine them coming again for a bail out?? The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Chief Joined: 1/3/2007 Posts: 18,129 Location: Nairobi
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mwekez@ji wrote:the deal wrote:mwekez@ji wrote:VituVingiSana wrote: What's the ROE & ROA?
All are currently negative. The huge loss has consumed equity and reduced the Net Book Value per Share by a whooping KES 4.27 and worse my analysis tells me that KK NBV is quite low What analysis is this???? when KK assets are carried at historic cost!!! The ROE & ROA are in the negative and it would never change even if the assets were not carried at historic cost!!! ... You young boy have a lot to learn. .... You also fail to answer the important questions (like Post 64) and then you come yapping. what an immature character you are LOL. Well @thedeal does have a point as does @mwekezaji. 1) The ROE & ROA are negative for 2012. That's a fact. 2) The NAV/share is positive (KES 4.57) but some (not all) assets (land & buildings) are carried at historic cost. KK has been around since 1957 & has acquired assets over many years. Some assets may be carried at a fraction of the real value. 3) I have a feeling that the sale of the 'under-performing' or 'excess' assets may yield an excellent gain. Nevertheless, this is a one-time gain. 4) Will the assets be sold in 2013? 2014? Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/3/2007 Posts: 18,129 Location: Nairobi
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the deal wrote:So I'm winning....
Projected EPS for FY 13 is KES2
DPS KES0.5
Payout ratio 25%
DY @ 10.20 is 4.9%
Assume exit PE of 10 vs current Market PE of 11.7
Therefore target Price: 10X2=KES20
Upside: 96%
Rating: Strong BUY
I agree but the OPERATIONAL PAT will not be KES 2 but a lower number. There will be probably be a decent EPS boost from the sale of assets (land) if done in 2013 as indicated in the Press Release. Good news: Lower interest rates in 2013 vs 2012. Lower debt levels in 2013 vs 2012. And a possible sale in 2014 OR a strategic investor. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/3/2007 Posts: 18,129 Location: Nairobi
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Kausha wrote:KK margin's are thin, reminiscent of most utility companies and retail companies operating in organized markets. KK being a utility company has natural protection from ERC in a way provided it can maintain its market share. Obviously 2012 murphy's law applied in KK. Whatever could go wrong went wrong. Sales decline, Hedge losses, cost pressure, margin erosion and a monumental loss. The mere fact that KK survived all this and has not come back to shareholders for funding is strong testimony of the company's strength. Even good old KCB can not withstand a 9B loss without requesting for a shareholder bailout. CERTAINLY KK will bounce back this year. The beauty of their case is that due to their high operational leverage if they avoid the hedges and contain costs they easily turn in a decent profit.
I know of a certain company on NSE which is likely to report worse results than KK in a few months time and this one will require a bailout immediately thereafter.
One certain pattern I have picked is that oil companies seem to get a whacking in election years. Pricing and ullage issues crop up in election years and these end up disorganizing oil companies. Politics in 2012. Pressure on ERC from 'politicos' to cap rate increases for KPLC & KK. And the firm in question is ... KQ  Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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mkonomtupu wrote:@mwekez@ji if you are a KK shareholder you need to read the article below with an open mind and then looks at the comments from @coldtusker and ask "What is prompting the principal shareholders of KenolKobil to want to dispose of their assets?" http://www.businessdaily...1/-/5eipsm/-/index.html
"If KenolKobil plans to remain in the market, then it may be necessary to completely and visibly overhaul its management (and board) to provide an opportunity for new style, vision and flexibility in a market that has become very competitive and with increased regulatory demands." IMHO KK has good assets but potential skeletons and they used lawyers too much to cover for the skeletons. In the words of Lawrence Garfield about lawyers in business you use them... "Kate Sullivan: Well, for someone who has nothing nice to say about lawyers, you certainly have plenty of them around. Lawrence Garfield: They're like nuclear warheads. They have theirs, so I have mine. Once you use 'em, they f*** everything up." The author of that article has a grudge against KK. Most of his "facts" are based on speculation, and with them he makes some very serious allegations. sensationalist, begrudged author. The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Chief Joined: 1/3/2007 Posts: 18,129 Location: Nairobi
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Aguytrying wrote:mkonomtupu wrote:@mwekez@ji if you are a KK shareholder you need to read the article below with an open mind and then looks at the comments from @coldtusker and ask "What is prompting the principal shareholders of KenolKobil to want to dispose of their assets?" http://www.businessdaily...1/-/5eipsm/-/index.html
"If KenolKobil plans to remain in the market, then it may be necessary to completely and visibly overhaul its management (and board) to provide an opportunity for new style, vision and flexibility in a market that has become very competitive and with increased regulatory demands." IMHO KK has good assets but potential skeletons and they used lawyers too much to cover for the skeletons. In the words of Lawrence Garfield about lawyers in business you use them... "Kate Sullivan: Well, for someone who has nothing nice to say about lawyers, you certainly have plenty of them around. Lawrence Garfield: They're like nuclear warheads. They have theirs, so I have mine. Once you use 'em, they f*** everything up." The author of that article has a grudge against KK. Most of his "facts" are based on speculation, and with them he makes some very serious allegations. sensationalist, begrudged author. Apparently, George Wachira was the GM of PIEA (the industry watchdog) & was replaced at KK's behest after the Triton scam. I think PIEA is in charge of ullage allocation. He was a director of KPC when the Triton scam happened & this prompted Total (which lost KES 100mn+) & KK to ask the entire board to resign. GW lost his cushy job as a KPC director. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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VituVingiSana wrote:Aguytrying wrote:mkonomtupu wrote:@mwekez@ji if you are a KK shareholder you need to read the article below with an open mind and then looks at the comments from @coldtusker and ask "What is prompting the principal shareholders of KenolKobil to want to dispose of their assets?" http://www.businessdaily...1/-/5eipsm/-/index.html
"If KenolKobil plans to remain in the market, then it may be necessary to completely and visibly overhaul its management (and board) to provide an opportunity for new style, vision and flexibility in a market that has become very competitive and with increased regulatory demands." IMHO KK has good assets but potential skeletons and they used lawyers too much to cover for the skeletons. In the words of Lawrence Garfield about lawyers in business you use them... "Kate Sullivan: Well, for someone who has nothing nice to say about lawyers, you certainly have plenty of them around. Lawrence Garfield: They're like nuclear warheads. They have theirs, so I have mine. Once you use 'em, they f*** everything up." The author of that article has a grudge against KK. Most of his "facts" are based on speculation, and with them he makes some very serious allegations. sensationalist, begrudged author. Apparently, George Wachira was the GM of PIEA (the industry watchdog) & was replaced at KK's behest after the Triton scam. I think PIEA is in charge of ullage allocation. He was a director of KPC when the Triton scam happened & this prompted Total (which lost KES 100mn+) & KK to ask the entire board to resign. GW lost his cushy job as a KPC director. Now the tone of his article makes sense. I didn't know all this and i could tell. The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Chief Joined: 3/24/2010 Posts: 6,779 Location: Black Africa
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Aguytrying wrote:VituVingiSana wrote:Aguytrying wrote:mkonomtupu wrote:@mwekez@ji if you are a KK shareholder you need to read the article below with an open mind and then looks at the comments from @coldtusker and ask "What is prompting the principal shareholders of KenolKobil to want to dispose of their assets?" http://www.businessdaily...1/-/5eipsm/-/index.html
"If KenolKobil plans to remain in the market, then it may be necessary to completely and visibly overhaul its management (and board) to provide an opportunity for new style, vision and flexibility in a market that has become very competitive and with increased regulatory demands." IMHO KK has good assets but potential skeletons and they used lawyers too much to cover for the skeletons. In the words of Lawrence Garfield about lawyers in business you use them... "Kate Sullivan: Well, for someone who has nothing nice to say about lawyers, you certainly have plenty of them around. Lawrence Garfield: They're like nuclear warheads. They have theirs, so I have mine. Once you use 'em, they f*** everything up." The author of that article has a grudge against KK. Most of his "facts" are based on speculation, and with them he makes some very serious allegations. sensationalist, begrudged author. Apparently, George Wachira was the GM of PIEA (the industry watchdog) & was replaced at KK's behest after the Triton scam. I think PIEA is in charge of ullage allocation. He was a director of KPC when the Triton scam happened & this prompted Total (which lost KES 100mn+) & KK to ask the entire board to resign. GW lost his cushy job as a KPC director. Now the tone of his article makes sense. I didn't know all this and i could tell. Kumbe! The guy is BD's go to guy when it comes to oil matters... GOD BLESS YOUR LIFE
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KenolKobil FY 2012 substrata loss of 9b!
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